Arizona Life & Disability Insurance Guaranty Fund (2026): $250K Coverage
TL;DR: The Arizona Life and Disability Insurance Guaranty Fund covers Arizona residents holding annuity contracts at insolvent carriers up to $250,000 per contract owner per insurance company (standard NAIC model). $300,000 cap on life insurance death benefits. Aggregate cap of $300,000 per individual per carrier across all life/annuity products. Funded by post-insolvency assessments on AZ-licensed insurers, not by AZ tax dollars.
CD vs MYGA, after tax
What $100,000 earns in 5 years: CD vs MYGA, after tax
Rates used: CD 5.00%, the top nationally available 5-year CD (Bankrate, October 14, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).
| CD, interest taxed every year | $121,081 |
|---|---|
| MYGA, tax-deferred, before tax | $133,507 |
| MYGA after paying tax on all the interest at withdrawal | $126,136 |
| Tax deferral alone adds about | $674 |
| MYGA ahead of the CD, after tax | $5,055 |
Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.
What the AZ guaranty fund is
The Arizona Life and Disability Insurance Guaranty Fund is Arizona's statutory safety net for life and disability insurance policyholders, created under Arizona Revised Statutes §§20-681 to 20-695. All life and disability insurance companies licensed to do business in Arizona are required members. The fund is governed by member representatives with oversight from the Arizona Department of Insurance and Financial Institutions (DIFI).
Mechanics:
- If a member insurer becomes insolvent (court-declared rehabilitation or liquidation), the AZ fund assumes responsibility for covered policies.
- The fund may continue contracts in force via successor insurer or pay benefits up to statutory limits.
- Funded by post-insolvency assessments on remaining AZ-licensed insurers.
- Not funded by AZ tax dollars.
AZ guaranty fund coverage limits (2026)
| Product type | Coverage limit per owner per carrier |
|---|---|
| Annuity present value (accumulation) | $250,000 |
| Annuity in benefit (payout) | $250,000 |
| Life insurance death benefit | $300,000 |
| Life insurance cash surrender value | $100,000 |
| Disability income | $300,000 |
| Long-term care | $300,000 |
| Aggregate cap per individual per carrier (life/annuity) | $300,000 |
Source: Arizona Revised Statutes §§20-681 to 20-695. Confirm current limits at azlifega.org.
Is the annuity you're looking at actually the best one available?
Send your email and I'll send what it really guarantees, what the surrender schedule costs you, and the two or three carriers paying more for the same guarantee. If it's already a good fit, I'll tell you that.
We’ll email it to you. Hans reads every one himself and replies within one business day. Hans Goldstein · NPN 20602398.
Rather talk it through? Or book 15 minutes on Hans’s calendar.
Who is eligible
Coverage applies to Arizona residents at the time the insurer is declared insolvent. Specifically:
- The contract owner must be an Arizona resident at insolvency.
- The insurer must have been licensed in Arizona at the time the policy was issued.
- For death benefits, beneficiary residency rules apply.
Arizona domicile follows standard tests: AZ driver's license, AZ voter registration, AZ-resident tax filing, primary residence in AZ. Snowbirds need to fully establish AZ domicile to qualify.
What is NOT covered
- Separate-account assets in variable annuities (held outside the general account).
- Synthetic GICs and certain unallocated annuity contracts above coverage limits.
- Contracts issued by insurers not licensed in Arizona.
- Speculative excess interest credits above contractually guaranteed amounts.
- Self-insured employer plans.
AZ §20-695 disclosure restriction
Arizona Revised Statutes §20-695 prohibits insurance agents from referencing the AZ guaranty fund in solicitation materials. Agents face license discipline for violations. The intent: prevent the guaranty fund from being marketed as a substitute for carrier due diligence.
This page is editorial commentary, not solicitation. Authoritative information is available directly at azlifega.org.
Split-carrier strategy for AZ deposits over $250K
| Deposit size | Carrier count | Example structure |
|---|---|---|
| Under $250K | 1 | $200K Athene MaxRate 5-yr |
| $250K-$500K | 2 | $250K Athene + $250K American National |
| $500K-$750K | 3 | + $250K Oceanview Life |
| $750K-$1M | 4 | + $250K at a fourth carrier rated A- or better |
| $1M+ | 5+ | Add Aspida, Equitrust, Nassau, etc. |
Joint contracts
Arizona treats jointly-owned annuity contracts as eligible for double the $250K limit (each joint owner gets $250K of coverage on the same contract), provided the contract is structured with both spouses as named contract owners. Confirm specific contract structure with the AZ guaranty fund before relying on the joint-coverage assumption.
Snowbird coverage considerations
AZ snowbirds (split-residence with WI/MN/IL/CO/CA) need to establish AZ domicile to qualify for AZ guaranty fund coverage:
- AZ driver's license (surrender out-of-state license)
- AZ voter registration
- Primary residence/homestead in AZ
- 183+ days/year in AZ
- Federal tax returns filed from AZ address
- Cancel out-of-state licenses, registrations, and primary domicile claims
Without proper domicile establishment, a "AZ snowbird" whose primary residence remains in WI/MN would be covered by their primary state's guaranty fund, not Arizona's. Coverage amounts are similar (~$250K standard NAIC).
Historical context
Major insurer insolvencies affecting Arizona residents (AZ guaranty fund stepped in for AZ-resident policyholders):
- Executive Life Insurance (1991)
- Mutual Benefit Life (1991)
- Confederation Life (1994)
- Penn Treaty (2017): primarily LTC
The historical record for A-rated and A+-rated carriers is essentially clean. Modern A-rated carriers operate under NAIC RBC (risk-based capital) rules with markedly stronger balance sheets than the 1990s era.
Related Arizona guides
- Best Arizona MYGA rates
- Arizona retiree MYGA strategy
- Arizona snowbird cash allocation
- Best Arizona CD rates
Independent Arizona MYGA quote: no obligation
Talk to Hans Goldstein, a licensed independent insurance producer.
MYGA rates change weekly. A Arizona-specific quote pulls the current top 3-5 carriers writing your age band and deposit size, side-by-side with after-Arizona-tax yield math so you can compare apples to apples.
Send your details. Within one business day, you get a written quote sheet (3+ carriers), surrender-schedule details, and a 15-minute call if you want one.
Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.
Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
We’ll email it to you. Hans replies within one business day. Privacy Policy.
AZ guaranty fund FAQ
What is the Arizona Life and Disability Insurance Guaranty Fund?
A nonprofit statutory entity created under Arizona Revised Statutes §20-684 et seq. that protects Arizona residents holding life insurance, annuity, and disability contracts when an insurer becomes insolvent. All AZ-licensed life and disability insurers are required members.
How much does the AZ guaranty fund cover on annuities?
$250,000 in present value of annuity benefits per contract owner per insurance company (standard NAIC model coverage).
Does the AZ fund cover variable annuities?
Only the fixed/guaranteed portion. Separate-account assets in a variable annuity are not part of the insurer's general account and are not covered by the fund.
Who is eligible for AZ guaranty fund coverage?
Arizona residents at the time the insurer is declared insolvent. Coverage follows residence at insolvency, not at purchase. AZ snowbirds need to establish AZ as legal domicile for coverage to apply.
Can my AZ insurance agent talk about the guaranty fund?
AZ Revised Statutes §20-695 restricts using the guaranty fund as a solicitation tool. Agents cannot reference the fund in sales materials. Editorial content like this page is permitted.
How is the AZ guaranty fund funded?
By post-insolvency assessments on remaining AZ-licensed insurers, prorated by AZ premium volume. Not by AZ tax dollars.
What's the aggregate cap at one carrier?
$300,000 per individual per carrier across all life/annuity products.
How do I structure a $750K MYGA in Arizona?
Split across three A-rated carriers, $250K each. Example: $250K Athene + $250K American National + $250K Oceanview. All three contracts sit under separate $250K AZ guaranty fund limits.
Disclosure
This guide reflects publicly available rate, tax, and state-guaranty-fund information as of the date stated above. MYGA rates, CD rates, state tax brackets, and guaranty-fund limits change frequently. Always confirm current values against the most recent carrier disclosure, bank rate sheet, and your state guaranty association's official website before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product, and is not tax advice. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers; appointment status with any specific carrier discussed may vary. No compensation has been received from any carrier or bank in connection with publication of this review. Always read the actual contract and consult a licensed advisor and tax professional before purchasing any annuity or CD. AM Best ratings, state tax law, and IRC tax treatment are subject to change.